Supply Chain Coordination Of Cold Chain Products Based On The Influence Of Sales Investment

With the development of our national economy, the recent years have witnessed an exponential increase in the number of cold chain products, which makes China’s cold chain logistics industry develop more and more quickly. Due to the perishable characteristic of cold chain products, extra sales cost should be put into in the sales process in order to keep them in the state of a low temperature, which helps ensure the quality of products. It is because of the extra sales investment that the original supply chain coordination is broken. Therefore, in the current circumstances, how to make the supply chains achieve coordination again is a problem worth discussing.This paper establishes two different models of supply chain contracts for cold chains whose demands are influenced by sales investments. First, we consider that retailers pay for all the sales costs of cold chains. In order to make the supply chains become coordinated again, one strategy is put forward, which is called "Buy-back Contract". The "Buy-back Contract" means that suppliers buy back the remaining products from retailers at a price lower than the wholesale price, which helps to share retailers’ risks. Then, we consider the opposite side that suppliers pay for all the sales costs of cold chains. In order to compensate this part of suppliers’costs, the "Revenue Sharing Contract" is brought forward. In the "Revenue Sharing Contract", suppliers will set a minimum order quantity for retailers. On the one hand, if retailers order less than the minimum order quantity, suppliers will punish retailers and also decide the punishment for each unit. On the other hand, if retailers order more than the minimum order quantity, suppliers will not either punish or reward retailers.The analysis and numerical examples show that both the two models of supply chain contracts can make the cold chain achieve its coordination again. However, under the "Buy-back Contract", the revenues of the whole supply chain, retailers and suppliers are all superior to those under the "Revenue Sharing Contract". Thus, the analyzing results can render a theoretical basis for the practical operation of suppliers and retailers in the cold chain logistics industry.